Stock Market Freefall Will Continue, Not New 10 Year Highs – Gareth Soloway on Bitcoin, AMC and Gold
The stock market rally that began in mid-June began to reverse by mid-August. On Monday, the S&P 500 was down 2.1% at the market close.
The volatility is not over yet, and in fact, stocks are likely to see new lows, said Gareth Solloway, chief market strategist at InTheMoneyStocks.com.
“This is a fear that the Fed will not back down,” Solway told David Lane, a Kitco news anchor. We got the minutes of last week’s Federal Reserve meeting, and that was kind of an end to the action. Right in those minutes when we touched the 200-day moving average, which was the technical resistance level. As soon as we heard from the Fed, it didn’t seem like they were as pessimistic as the market wanted.”
Soloway said stocks likely won’t rebound to their 2021 highs for many years.
“The stock market recorded its highs in 2021. We will not get rid of these highs for five to ten years,” he said.
The reason, Solway said, is deteriorating macroeconomic conditions.
“You’re going to have this genie out of the bottle called inflation, and it’s not going back to 2% or less for a very long time. It will mean that the Fed won’t be able to get us out of the future recessions that are to come, especially the next,” he said.
Soloway noted that the economy “sinking in stagflation” will last for years, affecting stock prices and earnings.
He said investors and traders should be stock pickers in the future.
“I think you’re going to want to move away from the indexes themselves and need to start looking and see what the new technology is, eg what stocks have a good return,” he said.
In addition, the strong US dollar also contributed to the decline in stock markets, Soloway said, as the strong dollar hurts export-oriented companies.
The DXY is up 0.73% on Monday.
Soloway maintains his view that gold will be the best performing asset by the end of this year.
To see Soloway’s views on Bitcoin, Ethereum, AMC, and Bed Bath & Beyond posts, watch the video above.
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